Confusion Or Obfuscation? Further Clouding Over The Sky Blues

Yesterday lunchtime, around one hundred and fifty people – and, perhaps more significantly, representatives of both the written and broadcast media, who were there to report on the story – met at The Ricoh Arena to protest against the recent events concerning Coventry City Football Club. Slowly but surely, the size of these protests is starting to grow as the reality of the chicanery that has been going on at the club over the last year or so starts to become increasingly apparent. What seems to be the motivating factor behind the protests, however, doesn’t seem to be a deep, entrenched knowledge of company insolvency law – although, as at all clubs at which administration is the inevitable result of a period of mismanagement – but something more prosaic. Next season, it seems likely, Coventry City Football Club will no longer be playing in the city that bears its name.

Even now, with the ticking down of the clock before the start of next season starting to reach something approaching critical mass, season tickets are still not on sale nobody seems to know where the club will be starting next season. What we do know for certain is that, at the time of writing, the club’s chances returning to The Ricoh Arena seem as slight as they have done at any point over the last few weeks, and on Thursday representatives from the Sky Blue Trust and Supporters Direct met with the Football League. We await their formal statement on what was discussed at that meeting with interest, but the sense of disquiet over what has started to feel like an orchestrated sequence of events on the part of the owners of the club, SISU, seems unlikely to die down just yet.

There was, of course, further news from the administrator of the club this week, but the significance of this remains unclear at present. Paul Appleton confirmed the sale of the club to the Otium Entertainment Group, which, as regular readers will already aware, is essentially the same people that took the club into administration in the first place. But… did he? Various news sources reported in no uncertain terms that “the club” had been sold, but the truth, as ever seems to be the case with this particular club, is somewhat more opaque than the headlines might lead us to believe. What Appleton has actually sold, by his own admission, is ” the right and title to certain assets possessed in Limited including the shares in the Football League and the Football Association,” rather than the whole club.

But what exactly is this, and did he even have the right to sell it? It’s a moot point. The Football League’s rules on such matters that any share can only be owned by a single company. Joint or trust ownership of shares is not permitted under their rules. More important than this, though, any early exit from administration may well close the door on stadium owners ACL’s offer for the club to continue to use The Ricoh Arena on a rent-free basis while it remains in administration. If the importance of the statement made by the administrator has been overstated, its knock-on effects could well be significant. The window of opportunity on the club staying in Coventry for the start of next season is closing rapidly.

Meanwhile, ACL expressed its surprise at having found out about the completion of this sale through the media rather than through Appleton himself. What a failure to notify another creditor about this sale says about Appleton’s attitude towards ACL is open to interpretation, but ACL did also add that his assertion that CCFC (Holdings) Ltd employs the players is not accurate, saying with a withering tone that has become increasingly familiar in recent months, that, “The Board also wishes to point out the fact that CCFC (Holdings) Ltd did not employ the Sky Blues players as per the most recent set of accounts filed for the business reporting upon the financial year ending 31 May 2011, signed off by BDO as an independent auditor on 20 June 2012.” So, further confusion as a result of public statements made about the relationship between CCFC Ltd, CCFC (Holdings) Ltd and the ultimate question of who owns what when it comes to Coventry City Football Club. One even could be persuaded that such a pattern might suggest a degree of intention towards obfuscation on the part of those making these statements.

While the administrator and the directors of the SISU-related companies at the heart of this story continue to talk about this sale with an air of inevitability regarding its imminent completion, though, the truth of the matter is that the sale of the club straight back into SISU’s hands is far from a done deal, and the fact the Football League agreed to meet with the Sky Blues Trust may yet point to a change of attitude in terms of their management of this particular car crash. Thus far, the League has given the impression of being somewhere between impotent and disinterested in its handling of it all. Yet the Football League – and by extension the Football Association – are the only organisations now that can now intervene with regard to this sale.

There seems to be little question that there should be a thorough investigation into whatever has been going on at Coventry City Football Club in recent months. The administration of Coventry City over the last few months has been a damning indictment of the state of insolvency law in this country in recent years, but the Football League is in a privileged position is that can act upon what has been going on there of late. It could amend its rules to ensure that directors of one limited company are not permitted to put a company into administration and then buy the club back from the administrators under the name of a different legal entity that is essentially the same people. It could insist that, in cases in which football clubs enter into administrations, they choose who the administrator is rather than the club itself. It’s their house so it’s their rules, and anybody from outside who gets involved with the intention of making a profit and making a profit alone who doesn’t like them is welcome to go and get involved in other spheres of business.

Such changes to regulations may come too late for the Coventry City supporters who are now having to contemplate hiking across the Midlands just to get to home matches, but it would be a start. It is time for those that are supposed to govern the professional game in this country to, well, actually govern it. Failure to do so would set a dangerous precedent at a time during which the nature of the ownership of football clubs has come under close governmental scrutiny. If they don’t act now, they may find that parliament does so on their behalf in the very near future. We can rest assured that a lot of people will be watching their next move very carefully, and that these people will not be limited to those with a connection to Coventry City Football Club, yet another club that has been run into the ground during a period when professional football in England is supposed to be richer than it has ever been before.

About The Author

Ian began writing Twohundredpercent in May 2006. He lives in Brighton. He has also written for, amongst others, Pitch Invasion, FC Business Magazine, The Score, When Saturday Comes, Stand Against Modern Football and The Football Supporter. Ian was the first winner of the Socrates Award For Not Being Dead Yet at the 2010 NOPA awards for football bloggers.

2 Comments

It amazes me a company with know trading
History and no Fiancial history can afford to take on the £70 million debt ? Something stinks

Simon
on July 1, 2013 at 11:58 am

It’s simple Stuart – Otium simply say they have an “agreement” in place with this “other company”, SISU, to buy CCFC Ltd for £1, or some other nominal fee, and when this transaction takes place, SISU will kindly wipe out the debt that Otium would owe SISU. “We don’t mind about that anymore” etc. It’s all by the book and through the loop holes, seemingly. With the FL/FA rule against? I can’t see why they will – bigger fish to try. As long as the Premiership gets its millions sorted for the TV contracts, everything is hunky doory. Ahhh look at those cute little lower league clubs trying to muscle in on the action when the FA Cup comes around!